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An Evaluation of Bogota’s Pro-Poor Transport Subsidies— How effective are they?

Camila Rodriguez's picture

Public transport is an important mode of transport, especially for low-income populations. Cities, however, struggle to provide public transport services for fares that are both affordable and financially sustainable. Since meeting both goals is quite difficult, transport systems either end up relying on high levels of subsidies or charging transit fares that are too expensive for the city’s poor.

To tackle this challenge, the World Bank in 2013 supported the city authorities of Bogotá, Colombia, in designing a pro-poor transport subsidy scheme that would help low-income populations have access to more affordable public transport. In Bogotá fares for its new public transit system are set higher -closer to cost-recovery levels-, than in other cities that provide greater public subsidies to their operators. Despite having more sustainable fares, Bogotá risks excluding people from its transport services—in fact, households in the poorest areas of the city spend a greater percentage of their income on transport, between 16% to 27%, compared to a maximum of 4% in areas that are relatively richer.

Sao Paulo’s Innovative Proposal to Regulate Shared Mobility by Pricing Vehicle Use

Georges Darido's picture
Taxi drivers in Sao Paulo recently protesting the regularization of TNCs such as Uber.
Photo by: Diego Torres Silvestre / Flickr

How to regulate and manage the emerging services of shared and on-demand mobility? This was a topic of much debate during the most recent Transforming Transportation event, a major global conference of transport professionals organized by the World Bank and the World Resources Institute in Washington DC in January 2016. 

One recent development from Sao Paulo stands out as a worthwhile effort to balance the objectives of promoting innovation by Transportation Network Companies (TNCs, such as Uber, Lyft, EasyTaxi, 99Taxi, and others) and ridesharing services (such as BlablaCar, Caronetas, Tripda and others) with the interests of the city and its residents. 

The Municipal Government of Sao Paulo has published for public comments until January 27, 2016  a draft decree to charge TNCs an upfront fee based on an estimate of vehicle-kilometers, also referred to as “credits”, to be used by its fleet of passenger cars in a two month period, plus a surcharge if credits are exceeded.   The idea is that any registered TNC could bid in an online public auction to purchase credits periodically and with certain limitations to ensure competition.  This approach would create a market for these credits and be aligned with the principle commonly known in the vehicle insurance industry as “pay-as-you-drive”, and would allow the city to receive a fee from TNCs for the commercial use of its public road infrastructure, which can then be used to better manage and maintain it.   The decree would exempt free ridesharing services which the city believes would help reduce the total number of vehicle-kilometers on its congested road network.

Transforming Transportation: From Global Targets to Local Action

Pierre Guislain's picture
Photo by Mariana Gil/ WRI Brasil Sustainable Cities

Last year saw major international commitments on critical topics like climate change, sustainable development and road safety. From the adoption of the Sustainable Development Goals (SDGs) to the Brasilia Declaration on Road Safety and the climate agreement reached at COP21,  these commitments—including the World Bank’s own pledge to increase its climate-related financing by one-third by 2020—provide clear international targets for the next 15 years.

Translating these global targets into effective action and tangible benefits for people across the world will be a huge challenge, however. It will require the alignment of various processes and initiatives at the global, regional, national and local levels, as well as significant support to the national and local authorities responsible for implementation.

Transport as a Solution

Transport is at the heart of these commitments – not only because transport is part of the climate and development challenge, but also because it is a big part of the solution.

Picking up the Glove on Road Safety

Verónica Raffo's picture
I was part of the World Bank delegation that participated in the 2nd Global High Level Conference on Road Safety, held in Brasilia on November 18-19. 
 
I arrived with high expectations on what this event could mean in terms of re-launching international efforts to fight against this global epidemic that kills 1.25 million people, and maims another 50 million, every year.
 
For the road safety community, the Brasilia conference was a crucial moment to take stock of what has been achieved so far, and rethink the strategy towards the future so the international community can scale up action and funding to meet the UN Decade of Action  targets and the respective SDG targets on road safety.
 
In these first five years of the Decade of Action (2010-2020), the initial objective, namely stabilizing road deaths, has been achieved: global road deaths (per year) have plateaued since 2007, as shown by the WHO latest report. We  should note, however, that among the largest contributors of road deaths (China, India, Brazil, among others) there is significant potential for under-reporting.
 
In any case, we are still far away from the objective at the heart of these international commitments: reducing road deaths by half by the end of the decade.  And we should also note that 90% of these deaths continue to happen in low and middle-income countries, affecting the youngest and most vulnerable.
Streets in Bogota / Photo: Carlos Felipe Pardo, Flickr.

How the Insurance Industry Can Make Our Roads Safer

Karla Gonzalez Carvajal's picture
Road crashes are a global health and development challenge with significant human and economic costs, especially in developing countries. The leading cause of death among people aged 15-29, road crashes kill 1.25 million people every year and injure another 50 million—more deaths than from malaria or tuberculosis. In low and middle-income countries, this is estimated to reduce GDP by 3 to 5%. The United Nations recognized the severity of this challenge by adopting specific road safety targets in the Sustainable Development Goals: to halve the number of global deaths and injuries from road crashes by 2020.
 
Photo: Carlos Felipe Pardo

This ambitious target can only be achieved through a concerted effort that involves all major stakeholders: national and local governments, multilateral development banks, bilateral donors, civil society, and the private sector. The latter, a key stakeholder in this agenda, can contribute the knowledge, resources, and innovations that are required to accelerate progress and decisively change existing trends.

The insurance industry is also a key part of this coalition. Already playing an important, if somewhat hidden, role in the road safety agenda, the industry insures almost 1 billion vehicles globally, helping to reduce the costs of road crashes to society and the economy.

Improvements in road safety benefit the public as well as the insurance industry. Broad-based insurance coverage makes sure that health and property costs for victims of road crashes are protected, but it also benefits insurance companies by expanding their market. In the same vein, reducing the number or severity of crashes benefits all of us, while it also reduces the volume of claims to insurance firms.

In fact a huge motivator to create good road safety practices lies in the sense of personal responsibility. A driver who wants to achieve a safe record is far more likely to avoid accidents than a driver who has no care for safety. If insurance is both well designed and implemented, it can have an enormous impact for improving road safety.

​Making Moroccan cities safer and more livable

Vickram Cuttaree's picture
Who hasn’t walked in a city thinking that it was made for individual cars and not people? In many cities, the situation is quite bad, with too many vehicles contributing to congestion and pollution and a visible absence of planning, making walking a perilous adventure.
 
That’s how it is in Morocco. Here’s a few facts that give some food for thought:
  • About 60 percent of Morocco’s population live in cities and that number is expected to increase to 70 percent by 2050.
  • Close to 20 percent of the urban population is considered economically vulnerable, living on less than $2 a day.
  • At the same time, spending on urban transport can represent as much as 20 percent of the poorest household’s income for an inadequate level of service.
  • In 2012, more than 48,000 traffic incidents occurred in Moroccan cities, resulting in 1,350 fatalities and more than 60,000 injuries, with most of the victims being pedestrians, cyclists, and motorcyclists.
  • More women than men depend on urban transport but women face security concerns along with the threat of sexual harassment. . 
 
Source: The Center for Mediterranean Integration / CODATU, Transitec, CasaTransport


What is less visible though is the pollution and climate impact. Transport is estimated to be contributing approximately 23 percent of total energy-related CO2 emissions. In cities, congestion results in more emission per vehicle-km, and the use of private vehicles instead of public transportation contributes to a high level of emission per passenger-km. Poor planning and weak public transport has led to urban development that contributes to longer commutes for many people and more greenhouse gas (GHG) emissions. The unreliability of public transportation has encouraged the use of mostly fuel-inefficient taxis.

​Lagos’ Bus Rapid Transit System: Decongesting and Depolluting Mega-Cities

Nicolas Peltier-Thiberge's picture
Photo:  Lagos Metropolitan Area Transport Authority (LAMATA)

As Beijing is issuing its first-ever red alert due to record levels of air pollution, it is time for us to reflect on how we can propose cleaner urban transport solutions to large cities in the developing world.
 
The transport sector accounts for 23 percent of energy-related global CO2 emissions, second behind electricity and heat generation. Moreover, transport-related emissions are set to rise from 23 percent to up to 33 percent by 2050.

In Beijing, banning half of the car off the streets (except electric and hybrid vehicles) is one of the most radical measures that the authorities have taken to fight what some observers have called airpocalypse. To compensate, 200 additional buses have been added to the cities’ public transport system. Schools have also been closed and outdoor construction works have been forced to stop. The social and economic costs of airpocalypse are enormous. With particulates levels more than 10 times the recommended levels, there are serious health consequences for Beijing’s 20 million inhabitants.
 
As urbanization continues all over the world, many mega-cities are desperately looking for credible solutions to improve urban transport systems and reduce traffic congestion. Sophisticated but expensive systems like underground subways are economically out-of-reach for many large cities in the developing world. The good news is that there are some excellent alternatives that the World Bank Group and other international partners have been promoting.
 
One of these alternatives is the so-called Bus Rapid Transit (BRT) system. Invented in Latin America and since then spread all over the world, BRTs have a particular relevance for fiscally-constrained, developing nations because of their relatively modest cost but also their dramatic benefits in terms of urban mobility and air pollution reduction. 

Access to mobility for slum dwellers with easy low-cost solutions

Jorge Rebelo's picture
Photo: Scott Wallace / World Bank


If we had a magic wand to quickly ease the daily commute of millions of people from home-to-work, particularly in developing countries, we would certainly use it as much as we could.  Unfortunately, we often struggle to find quick solutions and end up with big projects which take very long to come to fruition.

Although big projects are often justified for economic efficiencies and greater impact, aren’t there any solutions that might quickly make that daily commute more accessible, affordable and acceptable?  Note that accessibility is just one of the factors that make travel easier to reach jobs, education, health and leisure facilities. Transport also must be affordable to low-income users  and also frequent and acceptable in the sense of comfort and safety. This is not the case in many poor emerging countries where daily commute can be an ordeal that might affect the productivity of workers who must worry to get to their jobs and return home safely.

Making Transport Climate-friendly

Pierre Guislain's picture
In Rio de Janeiro, more than a hundred energy-efficient Supervia trains help move 700,000 passengers a day, allowing the poor “Cariocas” living in the outskirts of the city to access their jobs, go to school and reach health centers.  Greenhouse emissions per passenger in those trains are only one-sixth of emissions generated by cars. This was made possible by a $811 million loan from the World Bank and a grant from ESMAP.
 
Supervia is one example of the World Bank’s transport operational focus: supporting sustainable solutions – universal, efficient, safe, and environmentally friendly – to connect people and businesses to jobs, social services, and markets. In fiscal year 2015 alone, we have invested $5.3 billion in sustainable transport in 34 countries, contributing to the Rio+ pledge of $175 billion in sustainable transport funding from multilateral development banks over 2012-2022.
 
Photo: SuperVia/Imprensa RJ / Marcelo Horn

As we head towards COP21, one may wonder: “How many Supervias will it take to reach a 2 degree scenario? And where will the financing come from?”
 
Transport accounts for about 60% of global oil consumption, 27% of all energy use, and 23% of world CO2 emissions. With demand for mobility increasing exponentially, especially in developing countries, transport is the fastest growing source of GHG emissions. Inevitably, actions to reduce GHG emissions and stabilize climate warming at 2 degree Celsius, as agreed by the international community in 2009, will fall short if they do not include aggressive measures in the transport sector.
 
Yet, transport has until now taken a back seat in the climate negotiations. Transport has not been at the heart of the negotiations, the share of transport in climate finance has been very small, and donor support to and interest in transport has been minimal.

What will it take to accelerate progress on road safety?

Pierre Guislain's picture
As representatives from over 100 countries gather in Brasilia for the Second Global Ministerial Conference on Road Safety on November 18-19, the question on everybody’s mind is: what will it take to meet the Sustainable Development Goals target of halving the number of fatalities and injuries from road crashes by 2020?
 
The latest evidence from a WHO report shows that global road death estimates have plateaued since 2007, at an unacceptable level of 1.25 million deaths per year. A different and bolder approach is clearly needed.

Three major areas require special attention: Africa and low income countries more generally, large middle-income countries, and sprawling urban centers.
 
Photo: Simone D. McCourtie / World Bank

Africa is the region with the highest death rates: at 27 deaths per 100,000 population in 2013, it was one and a half times the global average of 18. Road traffic fatality rates have actually increased in Africa over the past few years, despite decreases in other regions. More generally, Low-income Countries, which have just 1% of cars and 12% of the global population, nonetheless suffer 16% of total deaths from road crashes.
 
We also need to pay greater attention to middle-income countries like Brazil, China, and India which, due to their large populations and motorization rates, together contribute over 40% of the global deaths from road crashes.  
Furthermore, by 2050, the world will add 2.5 billion people to our cities, which already account for about half of road fatalities. In the cities, attention to speed management and improving facilities for pedestrians, cyclists and motorcyclists is very important.

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